USAA got its start in 1922, when a group of Army officers together decided to insure each other’s vehicles. The company began advertising its services to other military personnel and grew, even during the Great Depression, claiming 30,000 members by 1940. Today, USAA offers a complete range of financial services to all who are serving or have served in the U.S. military and their families, and has approximately 7.7 million members.

Pros
USAA has a number of advantages over the competition, not the least of which is price. In comparisons with other insurers, the company typically has lower rates for similar coverage. Since military families make up a significant portion of its customer base, USAA shines in the area of customer service. The company offers a fully transactional website and it is easy to speak to a live person when calling the toll-free number. Because USAA is a full-service financial services company, members have access to discounts on checking, savings and many other products.

Cons
Purchasing car insurance through the company is not an option for everyone. The company caters primarily to members of the military and their families. If you serve or are a veteran, you and your immediate family are eligible for membership. While many USAA products and services are available to the general public, auto insurance is not. In addition, USAA is likely to decline a policy to those it deems a poor risk, even if they meet the eligibility requirements. According to the company, this is one of the ways it maintains those cheap rates.

Special Services
USAA does not have in-person offices nor does it employ the traditional agent. Most customer service matters, from quotes to claims, are handled by phone or online. The company offers a range of discount programs including safe driver, good student, loyalty and legacy (for those under 25 whose parents have USAA coverage). Those who request a quote and buy their policy online receive a $50 discount. Customers can also pay bills according to their paycheck schedule, and use the website to print out copies of their ID card.

States Covered
Coverage through USAA is available in all 50 states and the District of Columbia. Not all options, such as accident forgiveness, are available in all locations.

Overall Rating and Customer Satisfaction
USAA consistently ranks among the top auto insurance providers in everything from rates to customer service. In the October 2010 issue of Consumer Reports, USAA was one of only four companies (out of 22) to receive an overall satisfaction score of 92 or higher (out of 100) in a survey of readers for claims-related problems. Leading research firm J.D. Power and Associates gave USAA a perfect five-out-of-five score in all five categories measured (contacting the insurer, policy offerings, billing, price and overall satisfaction) in its 2010 comparison of more than 30 national and regional auto insurance carriers.

On its website, customers give the company a rating of 4.7 out of five, with 93% stating that they would recommend the company to a friend.